Patterson-UTI Energy (PTEN -2.95%), a large oilfield services provider focused on drilling and completion operations across North America, reported financial results for Q2 2025 on July 23, 2025. The headline: GAAP revenue totaled $1.20 billion, slightly missing analyst estimates, while a net loss per share (GAAP) of $(0.13) was deeper than the expected $(0.04) per share. The company faced lower activity and a non-cash asset impairment, causing operating income (GAAP) and adjusted EBITDA (non-GAAP) to fall from last year’s levels. While technology adoption made progress, key profitability metrics and backlog continued to soften. Management’s overall tone for the quarter reflected the impact of volatile commodity prices and reduced revenue visibility.
| Metric | Q2 2025 | Q2 2025 Estimate | Q2 2024 | Y/Y Change |
|---|---|---|---|---|
| EPS (GAAP) | ($0.13) | ($0.04) | $0.03 | -$0.16 |
| Revenue (GAAP) | $1.22 billion | $1.20 billion | $1.35 billion | (9.6%) |
| Adjusted EBITDA | $231 million | $324 million | (28.7%) | |
| Revenue – Drilling Services | $404 million | $440 million | (8.2%) | |
| Revenue – Completion Services | $719 million | $805 million | (10.7%) |
Source: Analyst estimates provided by FactSet. Management expectations based on management's guidance, as provided in Q1 2025 earnings report.
About Patterson-UTI Energy and its Business Model
Patterson-UTI Energy provides contract drilling, hydraulic fracturing (which is used to unlock oil and gas from shale rock), and drilling product solutions to oil and natural gas producers throughout North America and select international regions. Its operations are divided into three main areas: Drilling Services, Completion Services, and Drilling Products. The company serves a mix of large independent and major oil and gas companies, positioning itself with technology-enabled equipment and service integration.
In recent years, Patterson-UTI Energy has focused on building out proprietary technologies that automate drilling and completions, like its Cortex Automation Platform for rigs and Emerald natural gas-powered hydraulic fracturing fleets. The company’s strategy also centers around acquiring and integrating complementary businesses to broaden services and enhance operational scale, as seen with the NexTier and Ulterra acquisitions. Key success factors include staying ahead in technology, maintaining a strong contracted backlog for visibility, and managing capital spending efficiently in response to swings in oil and natural gas prices.
Quarterly Highlights and Segment Performance
The company faced notable pressure from oil market volatility and customer caution in Q2 2025, resulting in softer demand for drilling and completion activity. Management noted that the term contract backlog for U.S. drilling rigs declined to $312 million from $426 million at the start of the year. The backlog had reached $700 million in 2023, highlighting a clear reduction in future revenue visibility as legacy higher-priced contracts expire.
Drilling Services revenue (GAAP) dropped to $404 million in Q2 2025 from $440.3 million in Q2 2024, a decline of 8.3%, reflecting fewer operating rig days. U.S. contract drilling operating days slipped to 9,465 compared to 10,388 in Q2 2024, with the company guiding for a further drop in rig count to the “mid-90s” in Q3 2025. Adjusted gross profit for this segment was $149 million, compared to $178.8 million in Q2 2024.
In Completion Services, which offers hydraulic fracturing and related well-completion services, revenue (GAAP) was $719 million. Margins held "relatively steady" quarter-on-quarter, thanks in part to stronger utilization of Emerald natural gas-powered assets. Adjusted gross profit stood at $100.2 million, down sharply year over year from $152.1 million for Q2 2024. The segment made progress deploying its Vertex frac automation and expanded its digital monitoring software across fleets.
Drilling Products, which supplies drill bits and tools, provided a positive data point: revenue ticked up 2.7% to $88 million (GAAP) in Q2 2025, with record revenue per industry rig reported in the U.S. and Canada. segment profitability was essentially flat at $39.1 million compared to Q2 2024. International expansion was noted in offshore markets like the North Sea and Guyana, balancing against seasonal normalizations in Canada. The company reported a $28 million non-cash asset impairment related to assets in Colombia in Q2 2025, which negatively affected reported net income (GAAP) but did not impact cash flow in the period.
Shareholder returns were maintained, with $46 million returned through dividends and share repurchases ($0.08 dividend per share) in Q2 2025. The company continues to target returning at least half of adjusted free cash flow to investors. There were no material changes to the dividend policy, and no indication of a trend break in capital return strategy.
Outlook and What to Watch
Management provided detailed segment-level guidance for the third quarter. It expects rig count in Drilling Services to slip into the mid-90s with adjusted gross profit forecast at about $130 million for Q3 2025. While Drilling Products adjusted gross profit is expected to improve slightly, sequentially, in Q3 2025, this will be supported by international operations and a seasonal rebound in Canada. Corporate selling, general, and administrative expenses are forecast to decline slightly in Q3 2025, and capital expenditures for fiscal 2025 are projected at under $600 million, with the possibility of trimming further if activity slows.
Management did not offer clear full-year revenue or profit guidance. However, it noted that if oil-directed activity does not recover from current levels, U.S. oil production may see larger impacts than currently observed, as discussed in management commentary for Q2 2025, although natural gas basin work remains steady. The asset impairment in Colombia was recorded in Q2 2025, but management stated that the company’s balance sheet remains strong. For investors, key points to monitor in coming periods include further changes in backlog, customer activity levels in oil and gas basins, capital allocation priorities, and adoption rates for the company’s technology-led service offerings.
PTEN pays a regular quarterly dividend. The quarterly dividend was unchanged at $0.08 per share.
Revenue and net income presented using U.S. generally accepted accounting principles (GAAP) unless otherwise noted.
